ITES-3H part of Army's strategy to consolidate $5B in contracts

An Army solicitation worth $5 billion gives sellers a rare opportunity to provide the service with small computing equipment such as servers, workstations, desktop computers, notebook computers, tablets, thin clients and networking equipment.

With awards expected next year, the Information Technology Enterprise Solutions-3 Hardware (ITES-3H) solicitation is part of the Army’s process to consolidate IT purchases into larger performance-based, indefinite-delivery, indefinite-quantity contracts. At press time, bidding was scheduled to close Nov. 6.

The ITES-3H contract — which will support the Army’s requirements for commercial, off- the-shelf hardware — also will cover related products, such as video equipment, monitors, printers, scanners and IT upgrades.

ITES-3H is No. 8 on the Washington Technology list of the 20 largest defense contracts expected to be awarded in the coming year, and it is likely to be one of the few upcoming opportunities for suppliers to sell small computing equipment to the Army, according to Deltek.

The contract has a three-year base period, with two one-year options, including nine product catalogs for IT equipment. Officials plan to make at least eight awards by mid-2013, with four of them going to small businesses.

The contract will be managed through the Computer Hardware, Enterprise Solutions and Software (CHESS) directorate of the Army’s Program Executive Office for Enterprise Information Systems. CHESS manages much of the service’s IT acquisitions. CHESS also manages the companion $20 billion ITES-2S contract, which covers software purchases and runs through 2015.

The ITES-3H contracts call for a no-fee, flexible procurement strategy, allowing Army users to buy hardware, software and services through an e-commerce ordering system known as the “IT e-mart.”

“These contracts provide continuous vendor competition for best value and consolidation of requirements to maximize cost avoidance and leverage the Army’s buying power,” according to the PEO-EIS annual report for 2011.

Key Requirements

The ITES-3H contract would enable Army users to buy a variety of equipment to support the service’s IT infrastructure, according to the statement of work. A key requirement is that the hardware must be compatible with the Army’s network operations and net-centric operations. Companies furnishing equipment through the ITES-3H acquisition program also must be able to update and enhance the products they provide so that they are compatible with the evolving requirements of the Global Information Grid, information assurance policies and IP version 6 policies.

Contractors are expected to provide for technological changes and refresh their catalog offerings to meet requirements for new technology such as biometrics, embedded encryption, body-wearable computers and displays, wireless products and mobile personal data terminals, according to the solicitation.

“The diversity of the government’s user base prevents the provision of a single example that typifies the entire operation. The acquisition, therefore, stresses a well-rounded, total solution that uses standard interfaces that can be interconnected in unlimited configurations to satisfy multiple user requirements,” the statement of work noted. “The ITES-3H contract is intended to be a total solutions-based contract vehicle and include items that are for the fielding of a complete system or as part of a total design solution for all equipment items provided on the contract.”

Officials said some 87,000 orders totaling about $3.9 billion have been placed on the current ITES-2H contract, which runs through August 2013.

According to Deltek, 70 percent of ITES-2H business was with the Army. Before it was closed to all but Army users in March, the Navy was the second largest user, with 20 percent of the business and the rest scattered among defense and civilian users.

Potential Bidders

The prime contractors are CDW, Iron Bow Technologies, Dell Inc., GTSI Corp., IBM Corp. and World Wide Technology. Many of those companies have expressed interest in bidding on the new contract, along with computer giant Hewlett-Packard and others.

Most companies involved in the ITES-2H contract, or those which expressed interest in ITES-3H, were reluctant to discuss their intentions while the bidding period for the new contract was open. But one — Crofton, Md.-based Force 3 — was openly campaigning for selection on its website, listing five reasons why it’s “the right fit for ITES-3H.”

The company’s message said: “Force 3 has been providing support to the Department of Defense since 1991, to nearly 150 locations around the world. This puts us in a unique position to understand your issues and goals, including developing innovative solutions that address the Common Operating Environment directive.”